Corporate Value

Manager creates company value through Management activities. Company’s owners and managers are different interest subjects, and they connect because of company. Company owners design more reasonable salary system to encourage the manager and the managers utilize the salary system to get their max profit. This intermediate compensation mechanism design is one of the focuses of the game.In modern corporate governance research, a lot of academic discussion and analysis focus on executive pay. The domestic research literatures introduce perquisite-consumption concept late, and empirical study on monetary compensation and perquisite-consumption come out in recent period. In most domestic academic study, the research object concentrates on state-owned enterprises. Along with the Economic system market-oriented, the status and role of non state-owned enterprises promoted rapid. Compared with state-owned enterprises, non-state-owned enterprises’development starts late. Their small, unscientific, and Enterprise-operation is not standard. The disclosure of information quality is also not high, so the private Enterprise’s academic research is late. And private enterprises constantly improve their competitiveness in market competition. Private enterprises and SOE compete with each other, common development, and draw lessons from each other. They complement each other as to form our country current economy development pattern.In May2004, CSRC approved to setup SME board in Shenzhen stock exchange via approval of the State Council. Private enterprises get majority in SME board and the proportion of two types of business reflect character of our country’s small and medium-sized enterprises. Relative to the main board companies, SME board of listed companies have small size, high-tech and company growth is advanced. In the aspect of corporate governance, SME internal control system design and implementation have a certain gap with the main board listed companies.Then, how extent the Management compensation influences the value of the SME? How the Manager influence the results of monetary compensation and Perquisite-Consumption? How different the incentive pays effect of SME’ state-owned enterprises and non state owned enterprises? This paper wants to get the answer through the theoretical analysis and empirical test.The article is divided into four parts, as follows:The first chapter is the introduction, mainly explains the research background and research significance, and finishing the research thought and writing frame.The second chapter is the literature review. The review mainly from the Management incentive literature, and divided it into foreign literature studies and domestic literature studies.The third chapter is the related concepts and Basic theories. In the theoretical part of this paper lists the four theories.The fourth chapter is the empirical part. The paper put the managers’incentive into monetary compensation incentive and perquisite consumption. The samples are listed companies on the SME board in the period2007-2010. Then divide the samples into state-owned enterprises and non-state-owned enterprises as comparative analysis.The fifth chapter is list the conclusion of the study, suggestions and lack of paper’s analysis.The main contributions of this thesis:1. Based on the SME board listed company, the listed company according to the nature of an Enterprise group is a SOE and non-SOE.2. The management incentive for monetary compensation and perquisite-consumption, respectively two kinds of incentive methods to company value influence.3. Research data update to the years2007-2010. After the year2007, new guidelines for information disclosure of companies is stricter, weakening the management company to operate within the space, so the data update improves the conclusions of the study of reliability.4. In contrast to SOE and non-SOE managers’compensation and corporate value, transverse contrast is more convincing. Both descriptive statistics and regression analysis are always grouped data comparison, data results in the difference of more representatives.The inadequacy of the paper:l.The study sample year is relatively short, the regression results may have certain effect, this paper choose regression panel data GLS regression, sample annual cross period is longer, the regression results more convincing.2. Research data time section by the macroeconomic impact of large. Sample selection for during the year2007-2010, the period of the international financial crisis and national Economic rescue plan for the value of the company and management compensation is disclosed to have certain effect, the article did not consider.3. Perquisite-Consumption data worthy of further improvement.

With the Emergence of more and more group corporation and the constant development of market economy, related party transactions had been increasing on the scale and the type, playing more important role for affecting the corporate value. Related party transactions could reduce transaction cost, optimize the property structure, enhance market competitiveness, but controlling shareholder use related party transactions to infringe upon corporate value, harming interest of medium and Small -sized investors, and tunneling behavior. These behaviors effect market economy resource allocation and sustainable development of capital market and Social economy. Therefore, it is important to further study influence of related party transactions.Based on domestic and abroad relevant literatures reviewed, this paper applied the normative analysis method to study the relationship between related party transactions and corporate value in terms of transaction costs theory, coordination theory, internal capital market theory, asset specificity and principal-agent theory . Analysis results demonstrated that related party transactions could reduce transaction cost, realize coordinated effect, minimize capital cost, promote Investment of specific asset, but related party transactions would be used by insider controller and controlling shareholder to encroach company’s interests. Consequently, the related party transactions was classified into ten types which was accorded to the differences between purchasing (supplying) and selling (accepting), from the view of excess related party transactions, by choosing the data of listed companies of China from 2004 to 2006. Finally, this paper applied the methods of independent-samples T-test, Pearson correlation analysis and regression analysis to the study of the relationship between related party transactions and corporate value.The results of research revealed that: there are significant differences on excess related party purchasing (selling) commodity and excess supplying related party guarantee between different ultimate owners; there are significant differences on excess related party purchasing (selling) commodity and excess accepting related party guarantee between having controlling shareholder and having not controlling shareholder; there are supportive effects of excess related purchasing commodity ,excess accepting related party service and excess accepting related party capital on corporate value; there are harming effects of excess supplying related party capital and excess supplying related party guarantee on corporate value, there is an inverted U-shaped relation between excess selling related party commodity and excess accepting related party guarantee. Finally, the suggestions was provided as follows:(l)enhancing and perfecting the information revealing system;(2)promote actively the holistic listing;(3)develop strongly the institutional investors;(4)encouraging the shareholder from second to fifth to increase of Investment funds ownership, increasing the equity restriction ratio.

Shenzhen Stock Exchange listed companies Social responsibility guidelines releasedon September25,2006and Shanghai Stock Exchange listed companies environmentinformation disclosure guidelines released on May14,2008encouraged listed companies toactively fulfill their Social responsibility, disclosure social responsibility reports voluntarily.At the same time, the overall level of fulfilling corporate social responsibility is still low,self-consciousness is not strong. In listed companies’ opinion, fulfilling social responsibilitywill increase cost, reduce profit, and conflict with the goal of maximizing corporate value. So,fulfilling social responsibility is seen as a burden and companies try to avoid it. In this context,whether fulfilling social responsibility will reduce corporate value is a problem worthy ofstudying, the study has important theoretical and practical significance.First, the paper describes the background and significance, research status both domesticand foreign, content and method, and designs the framework. Second, the paper describes thepresent situation and problems in fulfilling social responsibility of listed companies. Third,the paper puts forward hypotheses combined with stakeholder theory, reputation theory,transaction cost theory. Fourth, the paper collects the data of A-share (823), analyzes theimpact on corporate value of fulfilling social responsibility. Fifth, the paper analyzes the resultand proposes the revelation of the study. My finding suggests that: fulfilling socialresponsibility will have significant and positive impact on corporate value.The study has the following meanings:(1)Correct the misunderstanding that fulfillingcorporate social responsibility will reduce corporate value;(2)Support the decision-making ofthe securities regulatory authorities that requires listed companies to fulfill socialresponsibility;(3)Enrich the domestic literature about the impact on corporate value offulfilling social responsibility.

In recent years, the corporate financial study come a new trend, manyresearchers began to make political connection into corporate financial study to widenthe research area. They have achieved a lot of crossover study results about thecompany’s financial and political connection, in which show that both in developedand emerging market countries, Enterprise’s political connection is widespread.Due to the traditional culture of our country and ancient feudal system, politicalconnection between the government official and businessman has always existed.Now China is the biggest developing country in the world, and is in the reform ofmarket economy transformation, Enterprise whether it has the political connectionwould result in different effects to Enterprise’s value. Instead of large corporate, smalland medium-sized enterprise (SME) must deserve more attention, it has been themajor subject of Economic development in China and also the most dynamic part, butSMEs face a long-term constraint and not commensurate with the status. Thedevelopment of SMEs has been constrained with financing, access restrictions,unprotected of property right, lack of political status. Above all the factors seriouslyhindered the development of SME. So SMEs have impulse in establishing politicalconnection which can be seen as a kind of “non-system protection” to increase thecorporate value. The study of this phenomenon has very important practicalsignificance.This paper firstly summarized the former domestic and international study ofthe influence of political connection on the enterprise value, and then defines theconcept and measure methods of political connection, and further analyzes themechanism of how political connection impact enterprise value. On the basis ofabove analysis, through2007-2010all the small and medium board listed companies in Shenzhen stock exchange as a sample, this paper empirically analysis the impactof political connection, including two components which is state-owned equity andpolitical relevance, to the value of small and medium enterprise board. Overall, thispaper have indicated that there is a negative relationship between whether theenterprise has political connection and enterprise’s Tobin’s Q value with SME boardlisted companies, but not significant. However, looking from the respective part ofpolitical connection, there is a significant negative correlation between whether isstate-owned and enterprise’s Tobin’s Q value. Also the political relevance whichcompanies has the initiative to set up has significant positive correlation withenterprise’s Tobin’s Q value with SME board listed companies. In a word, excessivegovernment intervention can damage the enterprise value, and SMEs who sought”political protection” result in value ascension.In addition, this paper verified whether the political connection can helpbusinesses ride out the storm after the financial crisis in2008. The result indicates:in panel A, increasing rate of the Tobin’s Q can well explained by whether it haspolitical connection, and in panel B, there is a negative relationship between whetherthe enterprise has political connection and decreasing rate of Tobin’s Q. This resultmay arise from that large-scale Investment have caused the government controlledmore resources, then the enterprise has the political connection has a very significantfight recession, promote growth effect.

As an important part of corporate marketing value chain, brand equity has animportant impact on corporate value. This process is market capitalization, throughthis process, the brand and brand equity can achieve the transition from intangibleassets to the Enterprise value. Meanwhile, the brand is a brand benefit Communityrelated to complex Social phenomenon. In addition to businesses and consumers, thecommunity of interests also includes shareholders, corporate managers, employees,and other stakeholders. Different stakeholders work in different ways, through theirimpact on brand image and brand equity, and thus affect the Enterprise value.However, previous studies have not considered these stakeholders. Therefore, it isnecessary to establish the impact model of brand equity for the Enterprise value,exploring the internal and external factors (including the industries, the internalgovernance mechanisms, etc.), to provide guidance on the regulation mechanism ofthis effect, and the strategic decision of the Chinese enterprises.Based on the previous theoretical results, we set up the conceptual model of therelationship between corporate value and managerial ownership variable, to study theimpact of the brand equity to the enterprise value, and from the perspective ofcorporate governance to explore Management layer holding as an adjustment variableon the main effect of regulation, and these effects may be differences betweendifferent industries.We use World Brand Lab evaluation data on the brand value as the measurement ofbrand equity, organize the managerial ownership variables and other control variables,and collect data of stake of the Management and other control variables, according tothe annual report data through the A-share listed companies CSMAR database. Wecollected7years data from2004to2010, using Eviews6.0to panel analysis of thedata, verify that the proposed assumptions.The empirical results show that:(1) brand equity can be positive influence on theenterprise value;(2) brand equity of managerial ownership will affect the value ofmain effects from the negative regulation;(3) the company’s main business where theindustry will adjust the brand equity value for the enterprise. Based on the aboveempirical results, this paper explained the theory and reality, and part of specificmanagement recommendations. Due to various constraints, this study still remains some limitations, which werediscussed in the last part of this paper. With reference to these limitations, furtherresearch directions have also been presented.

Executive Compensation incentive compensation has always been considered animportant corporate governance mechanism to solve the agency problem, people alsomore concerned about the issue of fairness in corporate compensation contract. Thispaper attempts to study on the issue of executives’ compensation equity of listedcompanies in China, the main concern include:(1) executives’ compensation equityimpact on performance in the controlling shareholders of companies? Specifically:control rights whether and how to influence executive compensation equity, executivecompensation is fair and whether to improve corporate performance?(2) therelationship and Economic consequences of the executive compensation inequity andabnormal related party transactions behavior?Firstly, the existing literature at home and abroad were reviewed, followed byincomplete property rights theory, incomplete contract theory, the principal-agencytheory and Management theory of power, the Basic related theory were introduced, andthen combined with our special system of background and practical, we proposed abase two-tier principal-agency analysis model between small shareholders,controlling shareholders and executives. Based on this model, we researched withtheoretical expectations and empirical testing between executive compensation equity,related party transactions and corporate value. The empirical results show that:(1) theexecutive compensation inequity is exist in the controlling shareholders’ company;(2)executive compensation inequity will affect corporate performance;(3) executivecompensation inequity impact on abnormal related party transactions behavior and isa motivation for the interests of the trenches;(4) executive compensation inequity andabnormal related party transaction behaviors affect corporate value, discretionaryaccruals has a negative value effect, nondiscretionary accruals has a positive valueeffect. Innovation and contribution of this paper is that identified the inequity andabnormal related party transactions, found the relationship that previous research andempirical testing has not been enough concern, provided relevant evidence and newpolicy proposals for the formulation of executive pay and corporate governance.

The Health development of lead and zinc industry has crucial significance for stable and long development of China’s national economy as lead and zinc are important and Basic raw material of national Economic.system. But as compared with the international advanced the counterpart of lead and zinc, Chinese lead and zinc industry presents several issues such as the Concentration Ration is low, industrial structure is insufficiency, the degree to ensure resource is low, the ability for financing is weak, the development of the resource value is not enough and so on. With the trend of the integration of global economy speeds up and no reproducibility of the resource, dependence of the lead and zinc resource of the global, insufficiency of comprehensive utilization of resources has enabled Enterprise’s sustainable development to become the bottleneck problems for Chinese lead and zinc Enterprise to participate in international competition. Particularly, the ability of strategy Management has become the key factor of success or failure for Chinese lead and zinc enterprises.As the core component of enterprise strategy, financing strategy and the ability and level of financing Management represent the comprehensive ability of enterprise. It’s very meaningful for sustainable development of lead and zinc enterprise to study the domestic and abroad circumstance of lead and zinc enterprise and structure. Strategy of sustainable value added and suitable financial strategy.Based on the systemic analysis of the outside macro-environment, industrial environment of lead and zinc, interior environment for CH Group, the paper applies value creation theory of enterprise, the sustainable growth theory and other leading theories such as enterprise and financial strategy to study target location, selection, implement, control and evaluation of financial strategy for CH group systematically.The paper will guide CH group to advance the ability of financial competition, promoting achieving “12th five year plan” and has the meanings for financial strategy management of it’s counterpart of lead and zinc to take for reference.

With the continuous development of the theory of corporate governance，the relationshipbetween ownership structure and corporate value is becoming one of the hottest topics amongtheory circle home and abroad. The reason is that there is an important relation betweenownership structure and corporation performance. As a special industry which operates money,banking plays a vital role in sound economy development and stable finance for one country.However, this relationship in banking is barely researched to date. There is no consensusamong the current research results. At present, the listed banks of China have achievedsignificant improvement in international competitiveness and operation capability, but theirownership structure still exist many unreasonable flaws, which constrains the improvement oftheir corporate value and corporate value. Therefore, the research on relationship betweenownership structure and operating performance of listed banks in China has crucial theoreticaland practical significance.Compared with the traditional indicators of corporate value evaluation, EVA is not onlytaking account of the cost of debt ownership, but also concerns the cost of equity ownership.Therefore, it can reveal the true operating performance and corporate value of listedcompanies, which can help investors more directly judge whether the Enterprise is creatingsubstantial value for shareholders or not. Firstly, the dissertation discusses the background,significance of the relationship between ownership structure and corporate value of listedbanks in China and the literature reviews both at home and abroad as well as its researchapproach. Secondly, the dissertation introduces the theoretical foundation of relationshipbetween ownership structure and corporate value, including principal-agent theory, insidercontrol theory, share balance theory and EVA theory. Then, based on the specificity of listedbanks, we analyze theoretically the relationship between their corporate value and ownershipstructure. Thirdly, ground of the first two chapters in this dissertation, we select the panel datafrom2007to2010of14listed banks to empirically analyze the status quo of ownershipstructure and corporate value by means of OLS linear regression.Through the empirical research, it is found that the relationship between corporate value and ratio of state-owned share is negative; relationship between corporate value and ratio ofcorporate-owned share is positive; relationship between corporate value and ratio ofcirculation share is insignificant; relationship between corporate value and share ratio of thefirst major shareholder is positive; relationship between corporate value and sum of the shareratio of the first5major shareholders is positive; relationship between corporate value and theratio of the second major shareholder’s share to the first major shareholder’s share isinsignificant; relationship between corporate value and the ratio of the sum from the secondmajor shareholder to the fifth shareholder to the first shareholder is positive. Research resultsoffer suggestions for listed banks to improve their corporate value so as to enhance theircompetitiveness by adjustment of ownership structure.

Income smoothing has been defined as the process of manipulating the time profile of earnings reports to make the reported income stream less variable, while not increasing reported earnings over the long run. As one form of earnings managements, the debates about its Economic consequence are also very intensive. The regulators and the public have perceived income smoothing as problematic, especially since the debacle of the energy giant Enron; Academic research, however, argue that income smoothing may not be problematic because income smoothing is a process of estimating accruals, and estimation of accruals is the heart of financial reporting. The managers could choose one of the accounting policies to make the corporate value maximized.Prior empirical results about the relationship between income smoothing and corporate value are also mixed. Several studies indicate that income smoothing means a lower risk, and a lower risk leads to a lower corporate value. Other studies, on the other hand, indicate that income smoothing leads to a higher corporate value.Because of this, this paper considers both income smoothing and earnings quality to study what is the effect of income smoothing and earnings quality on corporate value. The main conclusions of this paper are as follow:Firstly, if considering only a single factor, income smoothing leads to a lower corporate value and higher earnings quality leads to a higher corporate value. Secondly, if considering both income smoothing and earnings quality, income smoothing and higher earnings quality together leads to a higher corporate value.This paper is an expansion on the basis of previous studies. By using china’s securities market’s data, this paper studies what is the effect of income smoothing and earnings quality on corporate value. The results help to know about the role of income smoothing and earnings quality in the corporate value. What’s more, it helps investors make a right securities Investment strategy according to accounting earnings information and then optimize the allocation of resources in China’s securities market.

Substantive lack of internal control has been the problems in the survival and development process of China’s enterprises, the2008financial crisis has fully exposed the defects. In order to solve the problems, China has successively promulgated a series of laws and regulations to regulate the internal control. Because of his late start, China’s internal control system has not yet formed a unified theoretical basis, and still remains in the process of policies and regulations. In practice, our internal control system in general is still in its initial stage, to illustrate:the business managers did not pay enough attention on internal control, internal control weakness, and serious distortion of accounting information. In this context, it is of great importance to study on whether the depth of internal control is better for the Enterprise value growth and long-term development or not, so that we can establish a rational, efficient internal control system.At present, the Enterprise value maximization has become the business goals, and so do internal controls. This article tries to study on the relationship between internal control and corporate value. Firstly, we review the relevant literature related to the definition of the concept of internal control, internal control effectiveness and Enterprise value. After analyzing the meaning of enterprise value, we know that the enterprise value is equal to the present value of cash flows, so that you can find out the influencing factors of enterprise value; such as cash flow and discount rate. Then we analyze the relationship between internal control and corporate value at the basis of the principal-agent theory, risk Management theory and value Management perspective. Then we may find how can internal control influence corporate value by risk Management, value management. First from management perspective, value management is based on value maximization as the goal, while internal control is to achieve its business objectives, improve work efficiency and quality, to ensure the integrity of its assets. Although value management and internal control have their own focus, the final goal is to ensure the company’s business policy and strategic objectives; the ultimate goal is to achieve the maximization of enterprise value. Secondly, from a risk perspective, the risk is the motivation of internal control, its main purpose is to save a lot of frivolous claims cost, easy to control risk to enhance the value of the company. The mechanism of enterprise risk management to enhance corporate value through three channels:optimize the allocation of capital to efficient Investment activities, reduce the costs of financial distress, reducing the probability of corporate bankruptcies, and strengthen the incentive for management to further improve performance, reduce agency costs. The article measure the effectiveness of internal control from five perspectives:the control environment, risk assessment, control activities, information and communication, supervision. All these five elements are related to enterprise value. After analyzing on the correlation between the effectiveness of internal control and corporate value and combining the COSO internal framework and the specific situation, we build the internal evaluation index system of listed companies in China. Through the use of actual data to conduct empirical research, we find that internal control plays a really highly positive role in promoting enterprise value, showing a strengthening trend year by year with the deepening of reform and standardization of the stock market.The innovation of this paper is being divided into the overall effectiveness of internal control level and elements level. At the macro level, we find the overall effectiveness of internal control and corporate value are significantly positively correlated, indicating that the higher the effectiveness of internal control, the larger the corporate value. At the micro level, the effectives of elements and corporate value are closely related, activities, information and communication, supervision are both significant positive correlated to corporate value, indicating that the more effective of control activities, the more effective of information and communication, the more effective of supervision, the higher corporate value. While the correlation of environment, risk assessment and corporate value are different, this may be due to these two elements have not yet been recognized by the market or bad quantify factors such as cause, it also requires further study. In general, the effectives of internal control and corporate value are positive correlated and the trend is strengthening year by year, with the deepening of reform and standardization of the securities market.